Honda scale back on electric vehicles to concentrate on hybrids

Honda Motor on Tuesday said that it will scale back its investment on electric vehicles given slowing demand and would be focusing on capturing growing demand for hybrids with new models.

CEO Toshihiro Mibe told a press conference the automaker has lowered its planned investment in electrification and software through the 2030 business year to 7 trillion yen ($48.4 billion) from 10 trillion yen previously.

“Based on the current market slowdown, we expect EV sales in 2030 to fall below the 30% that we previously targeted,” Mibe said, adding battery-powered cars might make up only around 20% of the company’s sales by then.

Honda said it expects to sell 2.2 million to 2.3 million hybrid vehicles by 2030. Though, It has not released a total sales target for that year.

It plans to launch 13 next-generation hybrid models globally in the four years from 2027. It will also develop a hybrid system for large-size models that it plans to launch in the second half of the decade.

Earlier this month, Honda announced it had put on hold for about two years a C$15 billion ($10.7 billion) plan to build an EV production base in Ontario, Canada, due to slowing demand for electric cars.

Honda said, however, that it still plans to have battery-powered and fuel-cell vehicles make up all of its new car sales by 2040.

Other automakers that have scaled back EV investment include its struggling rival, Nissan, which this month abandoned a plan to build a $1.1 billion battery factory on Japan’s southwestern island of Kyushu just months after it had announced the project.